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Facts
The assessee trust applied for final registration under section 80G(5)(iii) of the Income Tax Act. The CIT(E) rejected the application and cancelled the regular approval, citing the assessee's failure to provide information and documents as requested in multiple notices and suspecting misrepresentation of facts regarding a previous approval.
Held
The Tribunal restored the matter back to the file of the CIT(E) to grant the assessee one more opportunity to present its case and submit necessary documents. The CIT(E) is to decide the application afresh after considering all evidence and providing due opportunity of hearing.
Key Issues
Whether the CIT(E) erred in rejecting the assessee's application for 80G registration without considering genuine circumstances and providing adequate opportunity for submission of documents.
Sections Cited
80G, 80G(5), 80G(5)(iii), 80G(5)(vi), 11AA(2)
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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
The appeal filed by the assessee is directed against the order dated 31.07.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him in Form No. 10AB under clause (iii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 (the “Act”) on 17.02.2024.
The brief facts are that the assessee trust applied for final registration u/s 80G(5)(iii) of the Act on 17.02.2024. On receipt of the assessee’s application filed in Form No. 10AB under clause (iii) of first proviso to section 80G(5) of the Act along with annexures thereto, with a view to verify the genuineness of the activities of the assessee and fulfillment of the conditions laid down in clauses (i) to (v) of section 80G(5) of the Act, the Ld. CIT(E) issued notice on 01.05.2024 through ITBA portal requiring the assessee to upload certain information/clarification such as date of commencement of activity, date of expiry of provisional registration, details of any other law applicable for achievement of objectives and the proof of compliance of said law, proof of identity of main trustees/directors /trustees, year-wise list of donations received, note on activities carried out etc. The compliance was sought by 17.05.2024. The notice was duly served on the assessee through e-portal/e-mail. Since the assessee did not comply, another notice was issued on 14.06.2024 requesting the assessee to submit compliance by 21.06.2024. On verification of submission and documents furnished by the assessee in response to the said notice, the Ld. CIT(E) noted certain discrepancies which were duly communicated to the assessee vide another notice dated 08.07.2024; such discrepancies being that the assessee seems to be not having provisional application u/s 80G(5)(vi) of the Act as on the date of the present application since the assessee has not furnished a copy of the same. The assessee was thereafter requested to show cause as to why its application should not be rejected and the approval u/s 80G(5) of the Act should not be cancelled. The assessee was specifically informed that in the event of failure to comply by the due date i.e. 15.07.2024, the application shall be liable to be rejected and the registration / approval shall also be liable to be cancelled. The said notice was duly served on the assessee through e-portal and email. However, the assessee failed to furnish any explanation to the discrepancies noted by the Ld. CIT(E) which led him to presume that the assessee has nothing to say in the matter. The Ld. CIT(E) hence passed the impugned order rejecting the assessee’s application and cancelling the regular approval dated 28.05.2021 under clause (i) of first proviso to section 80G(5) of the Act by observing as under : “7 Considering the above facts discussed in the show notice and discrepancies noticed and also that the assessee has not complied with the provisions of sub-clause (a) of clasue (ii) of second proviso to section 80G(5) of the Income Tax Act 1961 as well as the provisions of Rule 11AA(2) of Income Tax Rules, 1962 in spite giving sufficient opportunities, the undersigned is unable to draw any satisfactory conclusion about the genuineness of activities of the assessee and fulfilment of conditions laid down in clause (1) to (v) of section 80G(5) of the Act.
After verification of the submission furnished by the assessee along with the application, it is seen that the assessee has obtained regular approval under section 80G(5)(vi) of the Act under clause (1) of first proviso to section 80G(5) of the Act but it seems that the assessee was not approved under section 80G(5)(vi) of the Act prior to 01/04/2021 since the copy of such approval is neither attached with the original application while applying for such approval nor during the present proceedings. Therefore, it seems that the assessee has obtained the said approval by mis-representation of facts and the said approval is not a valid approval.”
Aggrieved, the assessee is in appeal before the Tribunal raising the following solitary ground of appeal :- “1. On the facts and in the circumstances of the case and in law Ld. CIT Exemption has erred in not granting registration u/s 80G without appreciating the facts of the case, and without considering the genuine circumstances which restricted the appellant in sending the reply in time, your appellant prays for and opportunity for submitting the documents and explain the reasons for non-submission and also for granting the registration u/s 80G of IT Act.”
The Ld. AR submitted that all the requisite details/documents were duly filed by the assessee before the lower authorities and the same are available on the portal. He filed a paper book before this Tribunal containing copies of the relevant documents i.e. Form No. 10A dated 21.05.2021, Registration Certificate u/s 80G dated 16.05.2011, Form No. 10AB dated 17.02.2024 and Provisional Certificate (page 8 to 14 of the paper book refers). Referring to the Bye laws of the assessee trust placed on page 15 to 17 of the paper book, the Ld. AR submitted that the assessee is a very old trust registered since 1973. He, therefore, prayed that the matter may be set aside to the file of the Ld. CIT(E) to adjudicate the same afresh.
The Ld. DR had no objection to the above request of the Ld. AR.
We have heard the Ld. Representative of the parties and perused the records and paper book filed on behalf of the assessee. On the facts and in the circumstances of the assessee’s case enumerated above, we are of the view that it would be judicially expedient and in the interest of justice and fair play if the matter is restored back to the file of Ld. CIT(E) to grant one more opportunity to the assessee to substantiate its case before him and consider the assessee’s application for registration u/s 80G afresh in light of the documents/details already available on record and such other supporting documents/evidence as may be called upon during the fresh proceedings and decide the matter on merits, in accordance with facts and law after allowing due opportunity of being heard to the assessee and present its case. The assessee shall provide the requisite support in terms of submitting the relevant details/documentary evidence as may be required/ called upon on the appointed date, failing which the Ld. CIT(E) shall be at liberty to pass appropriate order as per law. We order accordingly.
In the result, the appeal of assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on 30th January, 2025.